Gartner: AI Spend $1.5T in 2025, Market Consolidates
AI Spend to Climb as GenAI Market Narrows
2025 Forecast
$1.5T in worldwide AI spend
2026 Outlook
$2T+ expected globally
Global investment in artificial intelligence is accelerating, with Gartner predicting massive growth as the generative AI landscape consolidates around a handful of leaders.
Gartner expects worldwide AI spending to reach $1.5 trillion in 2025 and to exceed $2 trillion by 2026. Most of that outlay will flow into AI services, software, applications and generative AI models. Recent big-ticket moves underscore the momentum: Nvidia announced a $5 billion investment in Intel and a separate $100 billion commitment to OpenAI.
Consolidation: Few leaders, many niches
In an interview, Gartner analyst John-David Lovelock said the large language model (LLM) market is on a path similar to cloud infrastructure a decade ago, when the field coalesced around three dominant providers. He expects two or three LLM players to take the lead, supported by vast computing resources, while several smaller vendors retain low single-digit market shares.
The forecast assumes continued investment in AI infrastructure expansion, as major hyperscalers continue to increase investments in data centers with AI-optimized hardware and GPUs to scale their services. The AI investment landscape is also expanding beyond traditional U.S. tech giants, including Chinese companies and new AI cloud providers. Furthermore, venture capital investment in AI providers is providing additional tailwinds for AI spending.
As cost and scale demands rise, consolidation is likely to intensify. Vendors that don’t break into the top tier can still survive as niche or regional players, much as many providers have done in infrastructure-as-a-service outside the dominant trio of Amazon, Microsoft and Google.
Mind the double-counting
Lovelock cautioned that headline spending figures can be misleading because the same dollars are often counted multiple times along the supply chain. Revenue flows from chip makers to server manufacturers, then to hyperscalers, LLM providers and software vendors. Adding up each layer as if it were unique spends inflates totals. Even so, there will be room for many companies to make money across the stack.
Advice for enterprises and vendors
Prepare for AI to be embedded in nearly every product you evaluate over the next 12–24 months. Software and hardware suppliers alike will pitch options infused with AI, machine learning and GenAI.
- Assess a broad set of use cases rather than chasing a single “perfect” opportunity.
- Expect benefits that may not be fully captured by traditional ROI models yet.
- Plan for interoperability across models and services as the market tightens around a few leaders.
- Balance near-term experimentation with a roadmap for scale, governance and cost control.
The bottom line
AI spending is set to surge, while the field of foundational model providers tightens. Companies should expect pervasive AI features across their tech stack and plan strategies that can navigate both rapid innovation and a maturing, consolidating market.
